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Thursday, June 13, 2013

Oregon's Falling Labor Force Participation

This morning the Oregon Employment Department released a new report on Oregon's falling labor force participation rate. In 2012, Oregon’s labor force participation rate, the share of the population 16 years old and over that is employed or unemployed, was 63.4 percent. Oregon’s participation rate has fallen from its peak in the late 1990s to its lowest level since the late 1970s, mirroring the national trend in participation. Three major reasons for falling participation rates are the aging workforce, younger workers’ declining participation, and the results of the Great Recession.

Highlights from the report include:

The aging of Oregon’s population explains roughly half of the decline in Oregon’s labor force participation rate since 2000.

Sharp declines in the labor force participation rates of Oregon’s youth and young adults (ages 16 to 24) account for more than one-quarter of the decline in Oregon’s labor force participation rate since 2000.

Oregon's older population (ages 55 and above) is the only age group projected to have a growing labor force participation rate through 2020.

Even though labor force participation rates for Oregon’s older population are increasing, this age group still has lower participation rates than the prime working age group (ages 25 to 54). Therefore, as the older age group makes up a larger share of the population, Oregon’s overall labor force participation rate will fall.

Labor force participation rates among Oregon’s youth and young adults (ages 16 to 24) and prime working age group (ages 25 to 54) are projected to decline through 2020. The sharpest decline will occur among Oregon’s teenage population.

Across Oregon’s counties there is a fairly strong correlation between high unemployment rates and low labor force participation rates. In addition, many counties with high unemployment rates are rural counties that also have older populations. Both of these factors – high unemployment and an older population – contribute to lower labor force participation rates.

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